Public workers in NJ and cities are pushing for big changes to stave off massive hikes in health insurance rates

After months of lobbying Gov. Phil Murphy’s administration, local government leaders and unions in New Jersey are now turning to the state legislature to seek exemption from double-digit rate hikes on state health insurance plans.

Bonuses for local government workers are set to rise 20% on January 1 after a state health agency voted to approve increases in September. Union leaders and local governments have been warning for months that the rate hikes could lead to layoffs and property tax hikes.

“Much of the positive work done by lawmakers in recent years to stabilize property taxes will be sidelined if nothing is done to address this massive rise in community health insurance costs,” said Charles Wowkanech, president of the AFL-CIO of the state of NJ said in a statement. “It’s not often that unions and local government agree on an issue, but we do agree on this one.”

A coalition of labor representatives and local government leaders on Monday unveiled a policy proposal that includes cost-cutting measures and a one-time allocation of $350 million to offset increases in local governments and their employees.

Millstone Borough Mayor Raymond Heck on Monday urged the Murphy administration and state legislatures to “consider and move forward with this solution for the benefit of our public officials and our property taxpayers.”

“Today we have an unprecedented coalition representing both workers and management, speaking with one voice and offering a solution to an unprecedented and devastating increase in health care contributions for local governments, local workers and property taxpayers,” said Heck, who is also President of New Jersey League of Municipalities is.

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The $350 million would be allocated from the state’s general fund to the Department of Local Government Services under the proposal, which leaders said would guarantee annual savings of at least $100 million beginning in plan year 2024.

These savings would, according to the proposal, be achieved through measures to reduce the cost of the community portion of the state health care plan, including prescription drugs, without passing the cost on to workers or employers.

The plan would authorize the New Jersey State Treasurer to unilaterally implement the cost savings if they are not realized through the state’s normal plan design process.

“This unprecedented coalition between management and employees offers common-sense solutions to avert enormously negative consequences for taxpayers and public employees,” said Steve Tully, executive director of the American Federation of State, County and Municipal Employees Council 63.

“These recommendations provide local governments with adequate means to offset the sharp increases in public sector premiums, while also addressing the factors that continue to drive healthcare costs up,” Tully said. “It’s a fair solution for taxpayers, local governments and public officials.”

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Derek Hall can be contacted at [email protected]. Follow him on Twitter @derekhall.

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